time to sever ties unless you can see through lies.
your in a funny predicament yourself now, as you are obviously closely associated with this person... be careful of those around you, as it may be some one you both know mutually. This sounds like it was planned very well, and that they knew more than they should have known (Inside job written all over it based on your description). Protect yourself first is all I can say. Keep your own rears, and take extra precautions, precautions no one but YOU know about. Have your friends watch your friends, always, and without excuse or reason (don't tell them what or why, just ask clever questions
). Regardless of what you think they know or don't know. Assume they do know, and act like they don't.
This is terrible news. I don't want to see it become worse news. Especially not for you. Better safer than sorry
.